TMI Blog2020 (11) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... ject of an application of Advance Ruling. However, the meaning of the expression `proposed to be undertaken' cannot be expanded to include manufacturing, proposed to be undertaken. It is one of the fundamental rules of interpretation that if the words of a statute are in themselves precise and unambiguous, then no more is necessary than to expound those in their natural and ordinary sense as the words themselves in such a case best declare the intention of the legislature. There is no need for an artificial expansion of the expression as a result of which the interpretation may well go beyond the intention of the Legislature. The application is therefore barred under Section 95 of the CGST Act, 2017 - there is nothing in the provisions of the CGST Act, 2017, which prevents the Appellant from approaching the Advance Ruling Authority with a fresh application along with the sample/reports of the products and seek ruling under Section 97 of the CGST Act, 2017. - MAH/AAAR/RK-SK/30/2020-21 - - - Dated:- 12-11-2020 - SHRI RAKESH KUMAR SHARMA, AND SHRI SANJEEV KUMAR, MEMBER Present for the Appellant: Shri R. Nambirajan, Advocate (Proceedings under Section 101 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e), dated 28th June 2017. the goods falling under Heading No.68.09 are subject to the levy of GST at the rate of 18%. 3.5 However, Notification No.1/2017-Central Tax (rate) dated 28th June 2017 provides for concessional rate of GST at the rate of 12% on supply of -Glass-fiber Reinforced Gypsum Board- which is reproduced under for ready reference: SI.No. Chapter/heading/sub-heading/tariff item Description of goods GST Rate (1) (2) (3) (4) 92 44 or any other chapter The following goods, namely: - a. Cement Bonded Particle Board: b. Jute Particle Board; c. Rice Husk Board; d. Glass-fiber Reinforced Gypsum Board; e. Sisal fiber Boards; f. Bagasse Board; and g. Cotton Stalk Particle Board h. Particle/ fiber board manufactured from agricultural crop residues 12% 3.6 On reading of the above Si. No.92 of the notification, it is clear that the Entry No.92 does not provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the hearing for the admission held on 10.12.2019 and was satisfied that the product in question was eligible for obtaining an Advance Ruling and therefore admitted the appeal. 4.3 The MAAR in the impugned order dated 17.03.2020 has held that the sample of the product were not provided and in absence of the samples of the product proposed to be supplied, the classification cannot be determined. However, the MAAR did not direct the Appellant to provide a sample of the goods in question or provided the Appellant an opportunity to provide the samples. Hence, the Appellant was not provided an opportunity of being heard on the question of requirement to produce samples and the subsequent opportunity to manufacture the product to submit before the authority. Having failed to do so the MAAR has violated the principle of natural justice. 4.4 That the MAAR had been provided with the detailed test reports of the other products in the market manufactured by manufacturers other than the appellant, who were classifying the products as Glass fiber reinforced gypsum board and availing the benefit of the Sl. No. 92 of Schedule II to the Notification no. 1/2017-C.T. (Rate), 28.06.2017, sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CBIC, it is mentioned that an applicant can apply for advance ruling even before taking up a transaction. 4.8 That reliance in this regard is also placed to the decision of the West Bengal Appellate Authority for Advance Ruling in the case of Akansha Hair Skin Care Herbal Unit Private Limited reported at 2018 (16) GSTL 277 (West Bengal AAAR - GST). The facts of the said case were similar to the case of the Appellant where the authority for advance ruling had refused to classify certain goods which were not in existence. The AAAR in the given case held that the advance ruling shall also be available on products not in existence and proposed to be supplied in the future. Further the AAAR also proceeded to provide classification of the said products proposed to be supplied by the Appellant. 4.9 That on reading of SI. No.92 of the Schedule II to the Notification No. 1/2017-C.T. (Rate), dated 28.06.2017, it can be inferred that to claim the benefit of concessional rate of GST at the rate of 12% on goods mentioned in column (3) of the said notification, following two conditions are required to be satisfied by the registered person: (i) The goods should be classified un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total weight of the ingredients of the gypsum board in order to increase flexural, tensile, compressive and impact strength of the board. Once certain percentage of glass-fiber is added into the resultant product, the glass-fiber is bound to give reinforcement to the resultant product. 4.14 Thus, the Appellant is of the view that its proposed product shall be classifiable as GRG and shall attract GST at the rate of 12% as per Sr. no. 92 of Schedule II to Notification no. 1/2017-C.T. (Rate), dated 28.06.2017. 4.15 That reference is made to the relevant entry of the Notification No.6/2002-C.E. as it stood before being rescinded by Notification No.21/2006-C.E., dated 1-3-2006. The same is reproduced hereunder for ease of reference: SI.No. Chapter or heading No or sub-heading Description of goods Rate under the first Schedule Rate under the Second Schedule Condition No. (1) (2) (3) (4) (5) (6) 234 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, this expression would cover a manufacture which contained mineral fibers or yarn, irrespective of the percentage of the mineral fibers or yarn, and all such manufactures would he brought within the scope of Item 22F. 4.19 Thus, it is submitted that a gypsum board containing any percentage of glass fiber which provides reinforcement in any form to the gypsum board, could be considered as GRG in order to avail the benefit of concessional rate of GST @ 12% in terms of SI. No.92 of the Schedule - II to the Notification No. 1/2017- C.T.(Rate), dated 28.06.2017, even if such resultant product does not conforms with IS standards as prescribed by the government for a GRG board. 4.20 That when the notification granting exemption doesn't stipulate any conditions thereto, the notification should be interpreted as such. When the wording of the notification is clear, the plain language of the notification must be construed strictly and given effect to. Thus, applying Literal Rule of Interpretation, it can be said that where no quantity of glass-fiber is specified in the notification for qualifying it as GRG, presence of any amount of glass-fiber in the gypsum board. giving rein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods of Chapter 1 to 98. Under Entry 74 of the said notification, exemption is granted to 5% Ethanol blended petrol subject to the condition that the said product should conform to Bureau of Indian Standards specification 2796. Similarly, Entry 75 of the said notification while granting exemption to 10% ethanol blended petrol clearly mentions as a condition. conformance to Bureau of Indian Standards specification 2796. (iv) Entry 94A of the abovementioned notification, i.e. Notification 12/2012 - Central Excise, dated 17th March 2012 (inserted by Notification No. 3/2014 - Central Excise dated 3rd February 2014) which provides for exemption from payment of excise duty to Dicalcium phosphate (DCP) of animal feed grade confirming to IS specification No. 5470: 2002 falling under Chapter 28. 4.23 That if the intention of the Legislature was to require compliance with any specific standard, such requirement would have been clearly specified in the notification. Where no such requirement is mentioned in the notification, it can reasonably be presumed that the Legislature doesn't intend conformance to any specific standard in order to avail the benefit of the notification. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble Supreme Court, while awarding exemptions benefits to the assessee in absence of any conditions prescribed in the said notification, inter-alia, observed that the Notification has to be interpreted on its wording. No words, not used in the notification, can be added. 4.28 That under the GST-regime, wherever the intention of the legislature is to grant conditional benefit, the same has been explicitly stated, as is evident from few illustrative entries of the Notification No. l/2017-C.T. (Rate), dated 28.06.2017 and Notification No. 2/2017-C.T. (Rate), dated 28.06.2017, which have been reproduced as under: Schedule II to Notification No. 1/2017-C.T. (Rate), dated 28.06.2017 (CGST @ 6 %) Sl. No. (1) Chapter/Heading/Sub-heading/Tariff item (2) Description of Goods (3) 46B 2201 Drinking Waters packed in 20 Ltr. Bottles 191 8408 Fixed Speed Diesel Engines of Power not exceeding 15 HP Schedule III to Notification No. 1/2017-C.T. (Rate), dated 28.06.2017 (CGST @ 9 %) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), dated 28.06.2017, which provides for the concessional rate of duty at the rate of 12% for the product falling under the category of glass reinforced gypsum board. PERSONAL HEARING 6. A personal hearing in the matter was held on 15.10.2020, which was attended by Shri R. Nambirajan, Advocate, as the representative of the Appellant, and by Shri Ghanisht Yesu, Deputy Commissioner (Central Tax), as the Jurisdictional officer/Respondent, in the subject appeal matter. 6.1 During the course of the said hearing, Shri Nambirajan reiterated the earlier written submissions incorporated in the appeal memorandum. He also referred to the Advance Ruling pronounced by the West Bengal AAAR in the case of, wherein it was held by the WBAAAR that Akansha Hair Skin Care Herbal Unit Pvt. Ltd. [2018(16) GSTL 277 (West-Bengal AAAR-GST)[ West Bengal Advance Ruling Authority had erred in not pronouncing its order on the products proposed to be manufactured, which is contrary to the definition of Advance Ruling, as laid down under clause (a) of Section 95 of the GST Act, 2017, which specifically provides that supply of goods, -proposed to be undertaken by an applicant, also falls under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echnical glitches without scrutiny at the time of admitting the application for advance ruling and now the said requirement cannot be insisted upon. 6.6 It was further submitted by the Appellant that since the matter was not decided on merits by MAAR, therefore, the subject application should be remanded back to the MAAR for reconsideration in terms of Section 101(1) of the CGST Act, 2017 which empowers the Appellate Authority to confirming or modifying the Ruling appealed against. 7. Shri Ghanisht Yesu, appearing in the capacity of the jurisdictional officer, reiterated the earlier submissions, filed before us, wherein it was contended that since the proposed product under question is in hypothetical state, the Advance Ruling as to the classification of the said product, as sought for by the Appellant, cannot be provided as the said 'proposed product under consideration' is yet to be examined by the accredited laboratory for its specifications with regard to its composition and its essential characteristics. Hence. it is not possible to classify the proposed product under question under any Tariff Item and therefore, it is not possible to offer any comments in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaken by the applicant. The section, therefore, envisages that an Advance Ruling can be asked for a transaction undertaken or proposed to be undertaken. Any transaction of supply of goods or services or both, proposed to be undertaken, can be a subject of an application of Advance Ruling. However, the meaning of the expression `proposed to be undertaken' cannot be expanded to include manufacturing, proposed to be undertaken. We agree with the observations of the MAAR in this respect. It is one of the fundamental rules of interpretation that if the words of a statute are in themselves precise and unambiguous, then no more is necessary than to expound those in their natural and ordinary sense as the words themselves in such a case best declare the intention of the legislature. There is no need for an artificial expansion of the expression as a result of which the interpretation may well go beyond the intention of the Legislature. The application is therefore barred under Section 95 of the CGST Act, 2017 and we confirm the observations of the MAAR and also dismiss the appeal of the Appellant. 11. However, we find that MAAR has observed that the samples of the product are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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